■ How it works: There is a limited amount of other sources of capital financing, primarily restricted to the sale of municipal assets and the proceeds or profits that cities earn from their land development activities. These sources can be a significant source of revenue, but they are also relatively sporadic and limited to one-time windfalls.
■ Assessing the potential: The potential of these sources is generally limited as many western Canadian cities have already engaged in significant asset disposals. Examples include the sale of Winnipeg Hydro in 2002 and the sale of EdTel by the City of Edmonton in 1994. Edmonton also divested itself of the Edmonton Municipal Airport, and turned over its water and electrical operations to EPCOR. All of these have served as a source of new capital to help fund city operations and infrastructure, and also reduced levels of self-supported debt. However, the potential of the option is limited to specific circumstances extant in certain cities. More important, for a number of cities, what can be sold has been sold.
SUMMARY: Traditional sources of capital financing tend to be quite narrow and limited. For the most part, any increased usage of these options implies higher property taxes, user fees and development charges, increased support from other orders of government, and more municipal debt. Attempting to close infrastructure deficits with these traditional sources alone is unrealistic and unsustainable in the long-term. More important, many of these traditional sources of financing fail to address some of the key drivers fuelling infrastructure deficits.